Important New Jersey Tax Update

Good afternoon,

We would like to take a moment to remind you of two important things happening in New Jersey relative to your business.  You are receiving this email  because we believe one or both of these situations may apply to you.

NJ’s New Paid Sick Leave Act

If you have a payroll processing company, please contact them to make sure you are complaint with this new law which became effective last week on October 29, 2018.

For those of your processing your payroll in house, please take the time to become very familiar with the law to make sure you are compliant.  I have outlined some major points here, but please call us with any questions or concerns.

  • ALL employees, including seasonal, part-time, and on call are covered by the law.
  • You must provide a total of 40 hours of earned sick leave every benefit year.
  • Earned sick leave is accrued at the rate of 1 hours for every 30 hours worked.  Documentation of accrual and use is required to be kept for 5 years.
  • Earned sick leave accrued under the new law can be used 120 days after you begin employment (starting 120 days from Oct 29, 2018)
  • No adverse consequence may be taken on an employee for use of the earned sick time.  Documentation can only be required after three or more consecutive days of use.  If an employee is reinstated within six months, their prior accrued sick time is restored.

To do:

  • Employees must be notified by November 29th, 2018 and notice must be posted (notice attached for your convenience.
  • Update your policy to identify your benefit year, establish blackout dates, increments of use, and carryover treatment.  This would also be a great time to update your policies in light of other current events related to employee treatment and discrimination.
  • Review new policies & record keeping procedures with employees, management for compliance.
  • NJ Required Poster Link: https://nj.gov/labor/lwdhome/content/employerpacketforms.html

2018 NJ Tax Amnesty Program – Sales, Use, Litter, Hotel, Gross Income Taxes

The start date of the 2018 NJ Tax Amnesty program is to be released soon.  This program allows for delinquent or under-reported New Jersey taxes to be filed and paid in full with reduction of penalty and half the interest.  Eligible period cover return liabilities from 2/1/2009-9/1/2017. The program will end by January 15, 2019. An additional 5% non-abatable penalty will be imposed on any eligible debts not resolved during the Amnesty period.

Some restrictions apply, see NJ information Link Here: https://www.state.nj.us/treasury/taxation/amnesty.shtml

Please feel free to contact us with any questions and refer us to anyone else you may know that will be effected by these New Jersey current events.

Tax Update 2018

As tax season draws near I would like to take this opportunity to provide you with some year end tax planning assistance.  The Tax Cut and Jobs Act (TCJA), effective this year, will result in major changes to tax filings for individuals and businesses.  We appreciate you choosing us to trust with your tax matters and have been diligent in studying the tax law changes in preparation of the upcoming filing season.

Form 1040 (Individual) – Some items that have changed with the TCJA are: new alimony determinations (2019), health care penalty (2019), child & dependent tax credits, zero exemptions, qualified tuition plan usability, kiddie tax rates, tax brackets, tax rates, alternative minimum tax calculations, net operating loss treatment, increased standard deductions, and reduced itemized deductions.  Reductions to the itemized deductions include home acquisition debt limits and interest tracing, $10,000 limit for state and local taxes, casualty losses, and deductibility of miscellaneous items such as tax preparation fees, unreimbursed employee expenses, and investment advisory fees.

The IRS due date is April 15, 2019.  Like last year, due to changes in the IRS filing dates, we will not be accepting appointments after March 30, 2019, however you may send in your tax information to our office with all the required documents by April 5, 2019. If your tax information is not received by this time, your return may be put on extension.

Again, this year we will be utilizing our online Link Organizer portal which allows you to answer pertinent tax questions, upload tax documents, receive information/copies, and notify us of any life changes that may affect your tax filing quickly and securely. Please provide us with your updated contact information including an updated email address to cr@fjlamb.com. For those of you who will be mailing your documents, please attempt to open all mailings, discard excess (envelopes), and do not staple. For anyone who would prefer a paper organizer, we will gladly provide one at your request.

As a friendly reminder, please remember to confirm payment of all estimated tax payments with us and to return your signed 8879 promptly after receiving your return, so there are no delays in your electronic filing. As a general request, I ask that you schedule appointments early, as space fills up very quickly.

Businesses – For businesses with out of state operations, the Supreme Court decision of South Dakota v. Wayfair may create additional tax reporting requirements. The TCJA created new limits for meals and entertainment deductions, a credit for employer paid family and medical leave, an excess business loss disallowance, repeal of the domestic production deduction, and possible accelerated depreciation of business assets purchased.  For pass-through business entities (Schedule C, S Corp, Partnership), the TCJA changes include a 20% qualified business income deduction subject to various intricate rules and limitations.

1099 Forms issued by business clients must be filed by January 31, 2019, requiring us to have your information for issuance in our office no later than January 10, 2019.  If you are providing bank statements for preparation of your business taxes, please submit your year-to-date bank statements to the office as soon as possible.

Form 1065 (Partnership) & Form 1120S (S Corporations) – The IRS due date is March 15, 2019.  Please do your best to have your books closed and information to us by February 28, 2019.  Please note, no changes (except further closing adjustments we provide) should be made to your books after submitting them to us for completion of your tax returns.  After your return is completed, please contact us if you need assistance in closing your books so that no changes are made to prior years.

Form 1120 (C Corporations) – The IRS due date is April 15, 2019.  Please do your best to have your books closed and information to us by March 30, 2019.  The TCJA changes the corporate tax rate to a flat 21% and repeals the alternative minimum tax.

               To find out more about how these changes will materially affect you and how to strategize for them, please contact us for a dedicated planning session or to address any other questions or concerns you may have. Thank you for the opportunity to serve you.

Tax Cuts and Jobs Act (TCJA)

On 12/22/17, President Trump signed into law the Tax Cuts and Jobs Act (TCJA).  Some have hailed it as the largest major tax reform in over three decades. This sweeping tax package changes the way federal income taxes are calculated bringing a host of planning opportunities as well as uncertainties that may change your tax situation.  Feel free to give us a call today to receive more information and resources on how these changes could impact your personal tax plan.

NJ Sales Tax 2018

Please review the below notification provided by the New Jersey Division of Taxation.  Feel free to email us or call the office with any questions or concerns.

Starting January 1, 2018, the Sales and Use Tax rate will decrease from 6.875% to 6.625%.

Please prepare to update your records accordingly. The new tax rates will be:

  • Atlantic City Luxury Tax
    • 12.625% (9% Atlantic City Luxury Tax and 3.625% New Jersey Sales and Use Tax for sales subject to both taxes ‒ other than alcoholic beverages by the drink);
    • 9.625% (3% Atlantic City Luxury Tax and 6.625% New Jersey Sales and Use Tax for alcoholic beverages that are sold by the drink in Atlantic City);
  • Boat and Other Vessels Sales Tax ‒ 3.3125% (50% reduced rate);
  • Cape May County Tourism Tax ‒ 8.625% (6.625% New Jersey Sales and Use Tax and 2% Tourism Tax for Wildwood, Wildwood Crest, and North Wildwood). This rate is in addition to the 1.85% Tourism Assessment and the 3.15% State Occupancy Fee on hotel occupancies;
  • New Jersey Sales and Use Tax ‒ 6.625%;
  • Salem County Sales Tax ‒ 3.3125% (50% reduced rate);
  • Urban Enterprise Zone Sales Tax ‒ 3.3125% (50% reduced rate).

If you have any questions:

  • Visit here for more information about New Jersey Sales and Use Tax;
  • Call the Division of Taxation’s Customer Service Center at 609-292-6400. We’re available Monday, 8:30 a.m. to 5:30 p.m. and Tuesday through Friday, 8:30 a.m. to 4:30 p.m., except State holidays; or
  • Email us.